Alabama taxes — property, income, sales, retirement

Home·Tax overview·Alabama

Property tax, income tax, sales tax, and retirement-income treatment in Alabama. Quick read for movers, retirees, and remote workers.

Low property + low sales rates. Income tax modest. Retirement-friendly: no Social Security tax, partial pension exclusion.
Effective property tax
0.41%
of home value/yr
Income tax (top rate)
5.0%
Sales tax (state)
4.00%
local adds more
SS taxed by state?
No

Property tax

Alabama’s effective property tax rate is approximately 0.41% of assessed home value per year. On a $350,000 home that’s about $1,435/yr. Rates vary by county and municipality — this is a state-wide average.

Income tax

Top marginal rate: 5.0%. Brackets vary by income. For wage earners, the effective rate depends on filing status, deductions, and credits.

Sales tax

State base rate: 4.00%. Local municipal and county additions can raise the combined rate by 1-4 percentage points.

Retirement income

Social Security: Not taxed by state. Pensions & 401(k) withdrawals: Partial exclusion / credit available.

Top cities in Alabama

Huntsville · pop 230,402 · momentum 65

Mobile · pop 201,367 · momentum 63

Birmingham · pop 196,357 · momentum 40

Montgomery · pop 195,818 · momentum 64

Tuscaloosa · pop 114,288 · momentum 70

Hoover · pop 93,013 · momentum 63

Compare to other states: All 50 state tax overviews · All Alabama cities · Best Alabama cities for retirees

Sources: Tax Foundation effective property tax rankings, state DOR publications, AARP retirement tax guide. 2024/2025 representative figures — verify with a CPA for your specific situation.